A group of investors in Mayfair 101 has blamed the regulator for the downfall of the troubled investment schemes, claiming they are victims of an ASIC legal action which they have labelled a “national disgrace”.
A statement signed by 76 Mayfair investors said they willingly put their money into Mayfair 101’s M+ and M Core products and were fine with how those investments were doing before ASIC commenced its enforcement action against the manager.
“We are the victims of ASIC’s irresponsible actions against Mayfair 101 and [its] managing director, James Mawhinney,” the statement said.
“ASIC’s actions are a national disgrace and have impacted every one of us. We are calling ASIC out for what they have done. Many of us went to the court trial in Melbourne from 2024 to 2025. We saw ASIC try very hard to make Mr Mawhinney look bad, which is an attack on us and our financial wellbeing.”
Investor Nicola Kemp acknowledged to Professional Planner that people are surprised that some noteholders are staunch defenders of Mayfair and Mawhinney.
“That’s something that needs to be emphasised, that we have been given so much information,” Kemp said.
“We’ve been given so much access to James. He’s shown us – he sat with us – and shown us heaps of different pieces of evidence.”
Another investor, Bruce Golightly, pointed to a Senate inquiry into ASIC and argued the regulator’s misconduct wasn’t isolated to the Mayfair case.
“I would say one of the biggest risks of investing in Australia…would be the financial regulator themselves,” Golightly said.
“We’ve already had a Senate inquiry into ASIC. The outcomes of that inquiry were extremely damning and I would like to ultimately see a royal commission into ASIC.”
ASIC denied any wrongdoing when approached by Professional Planner for comment on the investor group’s accusations.
“ASIC’s investigations and proceedings have at all times been conducted with integrity and rigor,” an ASIC spokesperson said.
“ASIC strongly rejects any allegations that it has acted improperly. As ASIC has numerous proceedings before the court involving people and companies related to Mayfair 101, we cannot comment further.”
A third investor signed onto the media statement and who is credited with leading the campaign, Lauraine McDonald, said Mawhinney is aware of the investor campaign but that he couldn’t get directly involved in it.
“We put this together this statement on behalf all the stakeholders saying everything that has been published in the past five years is wrong,” McDonald said.
Tourism Mecca
ASIC commenced action against Mayfair in 2020, and earlier this month the Federal Court determined the Mayfair 101 Group companies contravened the law when they made multiple false or misleading representations in the marketing of products.
Mayfair acquired the cyclone-damaged Dunk Island in North Queensland in 2019 for $31.5 million and purchased 200 properties in the nearby town of Mission Beach with the aim of turning it into a “tourism Mecca”, according to court evidence.
The redevelopment was meant to be funded through the group’s investment products and ASIC alleged Mayfair was advertising debenture products that were higher risk than advertised.
The court judgment said Mayfair’s pace of real estate purchasing in the Mission Beach area was “frenetic” and lacked incoming capital to fund the deals.
Mawhinney blamed the Covid-19 pandemic and ASIC for the halt of new flows, but the court said he had “not grappled” with vulnerabilities in the structures he established, the frenetic pace of property purchasing and a lack of sufficient analysis of cashflow and funding capacity.
Investors who gave evidence at the trial invested between $100,000 (the minimum amount investible) and $11.88 million.
The deadline for Mayfair and Mawhinney to make further submissions to court has been extended to 15 August 2025.
A media announcement from Mayfair after the 11 July Federal Court judgment was released said that of the nine claims made, the court found Mawhinney was only liable for five.
‘We’re not stupid people’
The Mayfair investors say they were satisfied with their investments and were always paid on time until ASIC got involved. “When ASIC went after Mayfair, it hurt us too,” the statement said.
“This is deplorable conduct by an Australian Government organisation. It makes Australia an unsafe country to invest and do business in.”
The investors claim that ASIC showed no proof that anyone complained about Mayfair before it took action, nor did the regulator interview Mawhinney or ask for financial statements or attempt to “understand Mayfair’s business”.
Kemp said she was appalled by the action taken by the regulator.
“We’re not stupid people…the majority of us can see exactly what has happened,” Kemp said. “It’s like for God’s sake what on earth did you [ASIC] think you were doing.”
Another catalyst for the statement, in addition to the recent court judgment, was the opening of a cafe on Dunk Island by Annie Cannon-Brookes, the former wife of Atlassian founder Mike Cannon-Brookes.
“It proves Mayfair was a real business with real projects, not a ‘Ponzi scheme’ like ASIC told the court,” the investors’ statement said.
“We helped fund the site where the Dunk Island café is. It would’ve opened in 2020 if ASIC didn’t interfere.”
The investors say that because of means testing they can’t claim Centrelink benefits, because their investments have not been written off and nor has a liquidator declared a loss.
“The notes still exist and are incurring interest,” the statement said.
“Mayfair’s financial capacity to repay us has been nearly destroyed by ASIC’s irresponsible actions. This is the stark reality which ASIC cannot ignore.
“ASIC has damaged our trust in Australia’s financial system. They told the court things that weren’t true and have ruined people’s lives. Saying Mr Mawhinney’s big plans were risky is an attack on Aussie entrepreneurship.”
